SANJIV MISHRA vs ORIENTAL INSURANCE CO LTD

THIS complaint under Section 17 read with Section 12 of the Consumer Protection Act, 1986, has been filed by the complainants, the legal representatives of the deceased J.K. Mishra, praying that the respondent be directed to pay to them Rs. 5 lacs as assured amount under the Group Janta Personal Insurance Policy, (hereinafter called the Janta Policy for short).

THE substance of the averments in the complaint is that J.K. Mishra was an employee as Master Operator -cum -Assistant Roller in the Bhilai Steel Plant. While he was in service, he obtained a Group Janta Policy No. 152501/47/99/00176, as a member of the Indian National Trade Union Congress (INTUC for short). The complainants are the sons of deceased insured J.K. Mishra. The said policy covered the risk from 9.1.1999 to 8.1.2011 and in the event of death of the insured in accident, assured sum of Rs. 5 lacs was payable thereunder. It was further averred that the insured J.K. Mishra died on 1.2.1999 in an accident while on duty. It was further averred that complainants through their Counsels letter dated 22.12.2000, approached the opposite party/insurer for payment of assured amount under the Janta Policy, but the said claim was not settled. Hence, they filed the present complaint. The complaint was resisted by the opposite parties/insurer. In its written version, it was denied that the deceased J.K. Mishra obtained policy from the opposite party/insurer. It was averred that Janta Policy No. 176/1999 was issued in favour of INTUC for the benefit of its members and the premium of the said policy was payable after deduction from the salary of the employees who were members of the INTUC. It was also averred that the policy was issued on 9.1.1999 for some of the members whose premium was received by then, and thereafter, some other members, whose premium was received later, were also included under the said policy, from the date of receipt of their premium. It was further averred that though in the policy document, the period of coverage of risk was mentioned as per certificate given to the INTUC, the coverage of the risk of the members, in fact, commenced from the date premium was received from them. It was further averred that as the premium relating to deceased J.K. Mishra was received on 15.3.1999, the risk on his life, commenced on 15.3.1999, and since J.K. Mishra had died on 1.2.1999, the risk of his life, was not covered by the policy. It was, therefore, averred by the opposite party insurer, that the complainants are not entitled to any benefit under the policy. It was also averred that the policy was cancelled on 26.11.2001, the intimation whereof, was sent to INTUC by the opposite parties, by their letter dated 20.12.2001. It was further averred that complainant never preferred any claim before the opposite parties. Hence, the complainants were not entitled to any relief in the said policy.

LEARNED Counsel for the parties were heard. Record perused.

LEARNED Counsel for the complainants submitted that the policy was obtained by the deceased J.K. Mishra through INTUC, in view of memo of understanding arrived at between INTUC and opposite party -Oriental Insurance Company. It was also submitted that the deceased J.K. Mishra, father of the complainants, was an employee of Bhilai Steel Plant and Member of INTUC and had obtained Janta Policy from the opposite party. Premium from his salary for the month of January, 1999 was also deducted. The policy certificate was also issued in his favour covering the risk of his life from 9.1.1999 to 8.1.2011. Therefore, the complainants were entitled to the benefit under the policy, in view of accidental death of their father insured J.K. Mishra on 1.2.1999. As against this, the learned Counsel for the opposite party submitted that as per terms of memorandum of understanding, the risk was to commence on receipt of premium. It was submitted that as the premium was received by the opposite party/insurer after the death of J.K. Mishra; hence, the risk on his life was not covered. It was also submitted that as no claim was ever preferred by the complainants before the insurer, and as they have preferred the complaint directly; there was no question of deficiency in service by the opposite party -insurer. It was, therefore, submitted that complainants are not entitled to any relief.

IN view of the submissions as above, the basic question that requires consideration is : as to whether the risk of the deceased J.K. Mishra was covered by the policy issued by the opposite party/insurer?

IN the above context, it may be noticed that as per the version of the complainant, the Janta Policy was issued in pursuance of the memorandum of understanding between the INTUC and opposite party -the Oriental Insurance Company. It is further not in dispute that the premium towards the said policy was to be deducted from the salary of employees -Members of INTUC, and then it was to be remitted to the opposite party/insurer. Learned Counsel for the opposite party submitted that the risk was to commence from the date, premium was received by the Insurance Company. In the above context learned Counsel for the opposite party/insurer referred to Clause 4(f) of the terms and conditions of the said memorandum of understanding, which reads : After receiving the premium amount along with the list, the Insurance Company will issue the policy in the name of Steel Workers Union, Bhilai (INTUC) and the policy will become operative from the date of cheque received by the Insurance Co. Company will issue certificate of Insurance to each insured person/employee.

HOWEVER , it is clear from the said memorandum of understanding itself that the premium was to be deducted from the salary of the employees who opted to be covered under the Janta Policy. The said premium deducted from the salary of individual member was stipulated to be collectively paid to the opposite party/insurer, Oriental Insurance Company through the Union, (INTUC) as would be clear from Clause 4(d) which reads : Every member, who opt to be covered under this policy, will have to fill up a proposal form -cum -letter of authority to deduct the premium amount from his/her salary and submit the same to Union through Union Representative of their concerned section and these consent forms shall be forwarded to the BSP Management to deduct the premium amount from his/her salary and will be collectively paid to the Oriental Insurance Co. Ltd., Branch Office Bhilai, through Union along with the list of the persons/employees with P.No., Deptt. and Wage Bill Numbers.

IN the instant case, the deceased J.K. Mishra indisputably submitted his proposal dated 3.1.1999 for being covered under the policy. It is also clear from the pay slip of the deceased for the month of January, 1999, that the amount of premium was deducted from his salary. However, it appears that the said amount was remitted and collected by the opposite party/insurer much later and it was credited in their account on 18.3.1999. However, since premium was agreed to be deducted from the salary of individual member and was to be collectively remitted later through the Union, INTUC the risk would be deemed to have been covered from the date of deduction of premium, notwithstanding the clause in the memorandum of understanding that risk would be covered from the date of receipt of amount of premium, by the opposite party. In the above context, reference may be made to the decision of the Supreme Court in Delhi Electric Supply Undertaking v. Basanti Devi & Anr., III (1999) CPJ 15 (SC)=AIR 2000 SC 43. In that case, Delhi Electric Supply undertaking (for short DESU) had agreed that the Life Insurance of the employees of DESU, would be undertaken by them. In that context it was agreed that premium would be payable under Salary Saving Scheme, as per the said agreement. In the said case, the Apex Court observed that as in the scheme itself the employer was assigned the role of collecting the premium and remitting the same to the LIC, therefore, as far as employee is concerned, his employer will be the agent of the LIC. The above proposition was further elaborated and it was observed that as far as employee is concerned he was told that premium will be deducted from his salary every month and remitted by DESU to LIC as per agreement between LIC and DESU. For employees of DESU, therefore, DESU had implied authority as an agent of LIC to collect premium on its behalf and then pay it to the LIC.

IN the instant case also, since the premium was to be collected and paid under the Salary Saving Scheme, the employer i.e., BSP acted as the agent of the opposite party/insurer and as soon as premium was deducted and thus collected on behalf of the opposite party/by the employer i.e., BSP, the amount of premium would be deemed to have been received by the insurer/opposite party through its agent BSP. In view of the above, the deduction of premium from the salary for the month of January of the deceased J.K. Mishra would imply that he had paid the premium to the opposite party insurer, through its agent, and thus, he was covered under the Janta Policy, from the said date.

THERE is yet another aspect of the matter. It may be noticed that the opposite party had issued a certificate of insurance dated 5.5.1999 in favour of J.K. Mishra. The said certificate reads : This is to certify that Mr./Mrs./Miss. J.K. Mishra Personal No. 013107 Bill No. 5348 is covered under the Group Janta Personal Accident Insurance Policy No. 452504/47/99/00476 (w.e.f. 9.1.1999 to 8.1.2011), issued to Steel Workers Union (INTUC), Bhilai, covering their Members subject to Terms, Conditions, limitations, exceptions, exclusions incorporated in the said policy. Sum insured (for Member) Rs. 5,00,000.00 Sum insured (for spouse) Rs. 2,50,000.00 This certificate is being issued for the purpose of evidence of coverage under the above policy. Bhilai Date : 5.5.1999 From the perusal of the above said certificate, there is no scope for doubt, that the risk on the life of J.K. Mishra under the said Janta Policy was covered from 9.1.1999 to 8.1.2011. This certificate of insurance or policy document would clearly negative the contention of the opposite party/insurer that the risk on the life of the deceased J.K. Mishra was not covered at the time of his death on 1.2.1999. In view of the above, it is clear that the complainants who are the legal representatives of the deceased J.K. Mishra are entitled to receive the assured amount of Rs. 5 lacs under the policy; as indisputably the death of J.K. Mishra occurred due to accident.

THE complainants learned Counsel also submitted that as no claim was ever lodged by the complainants with the opposite party/insurer hence it could not be held that there was any deficiency in service, by the opposite party. However, it may be noticed that the complainants have been claiming compensation and had also served a legal notice dated 22.12.2000 to the opposite party insurer. However, their request remained unheeded. The opposite party/insurer were obliged to process the claim at least after receiving legal notice from the complainants and should have responded to the complainants in that regard. They have failed to do so. This clearly shows deficiency in service of the opposite party insurer.

LEARNED Counsel for the opposite party also tried to submit that the deceased J.K. Mishra was not insured, in fact, insured was INTUC. However, from the salary of J.K. Mishra as also from the certificate of insurance issued by the opposite party in favour of J.K. Mishra, there is no scope for doubt that the insured was the deceased and not the INTUC. Hence, the submissions of the learned Counsel for the opposite party cannot be accepted. Accordingly, the complaint is allowed. The opposite party is directed to pay to the complainants sum of Rs. 5,00,000/ - (Rupees five lacs) with interest thereon @ 9% per annum payable from 1.3.2001 i.e., after a period of 2 months from the date of service of notice on the opposite party. The opposite party shall also pay cost of this complaint to the complainant, which is quantified at Rs. 3,000.00 (three thousand) only. Complaint allowed.